Today Cuba is the focus of many important changes – changes within the country and changes in US policy toward it. I want to explore a little understood link between these two areas of change. I’ll start with the changes going on within the country and then at the end link to them the changed US policy toward Cuba announced December 17, 2014.

I want to address the changes underway in Cuba by focusing on the relation between the state and society. I want to begin with some general points about the state-society relation in a very different context, one more familiar to us, viz. the United States.

What is the role of government there? Looking first at the US Constitution, we see that in the Preamble the union of States was to ensure domestic tranquility, establish justice, and promote the general welfare. That is, a very positive and active role was envisioned for the government being established. The task before that founding generation was to build a nation.

That active role contrasts sharply with what we often hear today from political leaders. Under the prevailing neoliberal capitalist ideology it is the market, not government that is to steer society. The market is the sum of individual self-interested choices, as unguided and unrestrained as possible by government, no matter how democratic that government may be. The market is to be as free of government action as possible according to this laissez faire ideology. Democracy is conceived as the freedom of autonomous asocial individuals. Government should simply get out of their way. “Get government off our backs,” intoned Ronald Reagan.

Neoliberalism is a starkly undemocratic, even anti-democratic ideology. In democratic ideology government is not the enemy but rather the instrument of the popular will to do collectively what individuals cannot do so well for themselves. As I have put the point elsewhere, democracy is the possibility of collective decision making for collective action for the common good. [ Cliff DuRand, “Individualism and the Impoverishment of Democracy” http://www.globaljusticecenter.org/individualism] That is how justice is established and the general welfare promoted.

That is the vision that guided the social liberalism represented in the New Deal. When we speak of liberalism today it is usually social liberalism that we have in mind. This social liberalism arose from the social movements of the 1930s in their demand for justice in the face of a capitalism in crisis. The market had been shown not to be self-regulating and was not able to promote the general welfare. Instead it produced great inequalities of wealth and power as might have been expected by reflecting on the popular board game Monopoly. [Cliff DuRand, ]

However, the New Deal did not come to abolish the cruel game of capitalism, but to save it from itself. Social liberalism undertook to regulate capitalist markets and protect the unfortunate from its negative effects. In so doing it accepted the reality of a class divided society and functioned to maintain it while tempering it with a measure of justice in response to popular demands so as to be able to insure domestic tranquility. [cf. Milton Fisk, The State and Justice: An Essay in Political Theory (Cambridge University Press, 1989)]. And so, social liberal capitalism became the dominant public ideology until its exhaustion in the 1970s and replacement by neoliberal capitalism.

To understand the relationship between the state and society we have to look at class power. Capitalism is a class divided society. It is divided between those who own the means of production and those who do not and thus have to work for the former. There are other classes as well, but capitalists and workers make up the two major classes. Capitalists are in an economically dominant position, although that power can be curtailed by government when the popular classes are sufficiently active politically.

Social liberalism was possible because the class power of capitalists was weakened by the Great Depression and the working class was politically active and organized. Nevertheless social liberalism retained a capitalist system because of the still considerable class power of capitalists. It thus preserved an economic system in which capitalists retained the economically dominant position and with that class power were able to eventually rise again and weaken the fetters they experienced from the regulatory state. Any regulatory regime is unstable in capitalism. Neoliberal capitalism is the default position of capitalism in the absence of the power of the working class.

Cuban Socialism

With Cuba we find a very different state-society configuration. After the Cuban revolutionaries came to power on January 1, 1959 the function of the state they constructed was not to maintain the social order, but to transform it. They had overthrown a capitalist state and undertook to construct a socialist alternative to the existing dependent capitalism. Socialism is a directed transition from capitalism toward communism, where communism is understood as a classless society without exploitation that is democratically directed by the associated producers.

The difference between socialism and communism was encapsulated in two concise formulas of the post capitalist relation between individuals and society by Karl Marx in his “Critique of the Gotha Programme.” In the lower stage of communism, which has come to be called socialism:

“from each according to his/her ability, to each according to work.” Each is to receive back from society what they have produced by their work. This is the first stage by which society can begin to emerge from “the narrow horizon of bourgeois right,” although inequalities will remain, although they will be meritocratic inequalities.

In the higher stage, called communism:

“from each according to his/her ability, to each according to need.” Here it is recognized that all are not equal in ability, nor are we all equal in our needs. Communism is possible when there is a sufficient sense of social solidarity so that each will contribute what they can and the needs of all will be taken care of from the common wealth.

Although Marx did not summarize the relation between individuals and society in capitalism in such a neat, concise formula, it might be stated as:

“from each according to his/her poverty, to each according to his wealth.” That is, it is those who are impoverished in the sense that they do not own the means to work, who then have to labor for those who have that wealth and thereby become wealthier. Capitalism is a system in which those who have, exploit those who do not have.

Fundamentally the Cuban Revolution undertook to overcome this class system of exploitation. As a first step it simply expropriated the property of foreign capitalists and those Cuban capitalists who left the country. But where do you go from there? How do you move society beyond capitalism, constructing socialism and building the way toward communism? Unfortunately there are no blueprints for such a directed transition of society. It was necessary to invent the way. And this has been done by a lot of trial and error over the last half century. Broadly we can see three periods in the Cuban experiment to “found society anew.”

The 1960s was a revolutionary romantic period. The euphoria of release from the US dominated neocolonial capitalism motivated great idealism among the popular classes and the leadership. This was the period where efforts were made to build socialism and communism in parallel with each other, not as successive historical stages. Many social benefits where made available for free or at minimal cost: education, health care, transportation, telephone service, utilities, etc. To each according to need. Revolutionary consciousness was to be the motivator for work, not material reward. Che Guevara modeled this new socialist man through his voluntary labor.

However, by the 1970s it was seen as necessary to institutionalize a new system. It was during this decade that Cuba adopted the state socialist model from the Soviet Union. Based on the state ownership of the productive resources of society, the state undertook to direct the economy in a rational, planned way in the name of the working people of Cuba as a whole. With lots of trial and error along the way, this state socialism has prevailed up to the present.

Now Cuba is undertaking to renovate its socialism, to renew it, to reform it (various terms are used to characterize the process underway). As we will see, this involves moving away from the state socialist model and inventing a new one, more in tune with the original vision of socialists in the 19th century. Fidel in a landmark speech at Havana University on November 17, 2005 said "among the many errors that we have committed, the most serious error was believing that someone knew how to build socialism". Cuban socialism never stopped searching, rectifying, starting afresh: each decade meant in some way a new beginning, a new search [for the right path].

As we look at the course of the Cuban experiment I want to focus on the role of the state, the economy, political democracy, consciousness (particularly revolutionary will) and the popular classes. In the first stage of the 1960s capitalist property was expropriated (but not personal property) and then in 1968 the property of the petty bourgeoisie was expropriated. The state became the owner of the means of production in the name of society as a whole. The state undertook to manage the entire economy according to a plan. There was no longer a market.

In the 1970s what I have called state socialism was institutionalized with the adoption of the Soviet model. Basic needs were guaranteed with the provision of free health care, education, a very egalitarian income scale. The state took care of the people and in return they gave it their loyalty. The success of state socialism in promoting the human development of its people is well known. [Cf. Henry Veltmeyer, Human Development: Lessons from the Cuban Revolution (Fernwood 2014)]

Less well known, in the U.S. at least, is the democratic character of its political system. So let me describe it briefly. Established in 1976, Poder Popular, as it is called, is a highly participatory representative electoral system. Delegates are elected in their neighborhoods in non-partisan elections based on their demonstrated civic activities. The campaign consists of each candidate posting their picture and resume’ around the neighborhood. That’s it. Cuba has really taken money out of its politics. Typically voter turnout is in the 90%+ range. To be elected a candidate needs over 50% of the votes cast. These delegates form the municipal assembly. There is a similar process at the provincial level. The national legislative body or National Assembly is also selected by direct election and is made up of national figures as well as local delegates (50%) that is broadly a cross section of the Cuban population. Since this is a parliamentary system, the National Assembly elects a government called the Council of State and it then elects its officials, including the President. There are no adversarial political parties. In addition to being participatory, this system seeks to build consensus. When there are sharp divisions on an issue, there are consultas held in every workplace, neighborhood and school to get the opinions of the popular classes. It can take months or even years to build consensus. [Arnold August, Cuba and Its Neighbors: Democracy in Motion (Fernwood Pub., 2012)]

One such popular consultation was held in the late 1980s. This came out of a growing concern that the Soviet model was growing too bureaucratic. So there was a several year long consulta called Rectification of Erroneous Tendencies and Errors. There was low productivity due to a lack of worker incentives. The overly centralized, hierarchical system was criticized. There was lots of participation, yes, but little opportunity for initiative. A kind of passivity had spread among the population –the twin of the growing bureaucratization of the state. A Cuban friend of mine told me that although in socialism the state was supposed to gradually wither away, in fact it was civil society that was withering away. The state-centric model of socialism was not leading toward communism.

Unfortunately this move toward reform of state socialism was interrupted by the economic crisis of the 1990s after Cuba lost its advantageous trading relationship with the Soviet Union and Eastern Europe. The current reform efforts can be seen as a continuation of that reform process begun nearly 30 years ago.

Renovation of Socialism

The popular consultas for a reform program began on July 26, 2007 when Raul Castro asked the people to discuss the future of Cuba’s socioeconomic development. More than 1.3 million proposals were put forward in the subsequent debates. Two years later, in further popular consultation nearly 2.3 million proposals for action, supportive comments, suggestions and criticisms were added. Proposals for reform were consolidated into a draft document called Economic and Social Policy Guidelines for the Party and the Revolution (Lineamientos). Consisting of 291 points filling 32 pages, it was released in November 2010 for public discussion. The draft Guidelines were analyzed in 163,079 meetings in work centers, schools and neighborhood meetings. In all there were 8,913,838 participants. Finally after nearly 4 years of discussions with the people, in April 2011 these Guidelines were adopted as policy for the reform of the Cuban economy. After all of that, who can say that Cuba is not democratic?

So what is being changed? I want to focus on what I think are the most fundamental changes, changes that portend a new model of socialism. While not abandoning a central role for the state, basically the reforms involve moving away from the state socialist model toward one with a far more active civil society. The opening section of the Guidelines on the Economic Management Model brings into focus the changed relation between the state and society that is envisioned.

The management model recognises and promotes, as well as the socialist state enterprise which is the principal form of the national economy, the legally sanctioned modalities of foreign investment (mixed enterprises, international contractual arrangements, among others), cooperatives, peasant farmers, lessors of state-owned farmland, lessors of state-owned premises, self-employed workers and other forms all of which, together, must contribute to boosting efficiency. [Guidelines #2]

Cuba is looking toward a far more mixed economy. 84% of the Cuban workforce had worked for the state. This led to overstaffing and low worker motivation. The Cuban state has been the employer of last resort. One might even say, of first resort. At least 1,000,000 state workers are redundant and the state can no longer afford that. So large numbers are being laid off and are shifting into the non-state sector of the economy. This growing sector encompasses the self employed or cuentapropistas and the cooperatives. The small private businesses that had been expropriated in 1968 are now being recreated to absorb redundant state workers. There is a recognition that there is a place for a petty bourgeoisie in socialism. The state does not need to, nor is it able to do everything. Many economic activities can be left to individual entrepreneurs so long as they are regulated and taxed so the petty bourgeoisie does not become a big bourgeoisie. As the Guidelines state, “In the forms of non-state management the concentration of property [ownership] by juridical or natural persons shall not be permitted.”

Private businesses are now allowed to employ wage labor. (Curiously, these wage laborers are also called self-employed.) Previously, employment in such businesses was limited to family members. But now all the authorized areas for self-employment can employ others outside the family as wage laborers. There is a requirement that employers pay social security taxes for their employees (as well as for themselves) to compensate the state for the social benefits it provides.

I have asked several people what was the rationale for wage labor in a socialist society? How can they justify the private exploitation of labor? It is forbidden in the Constitution. And is it even necessary? If a business needs more labor power than is available in the family, why not organize it as a cooperative? That way all can benefit from their collective labor and participate in collective decision making. The answer I got was a blunt “there is no rationale for wage labor in socialism!” The most that was said for this reform was the suggestion that it is necessary as a short term measure to quickly absorb surplus workers. It is recognized that the formation of coops is a better solution in the long term. And it is that that is now coming into play.

While Cuba has had cooperatives since the early years of the Revolution, they were limited to agriculture. In December 2012 the National Assembly passed an urban coop law that establishes the legal basis for new urban coops. Here are some of its main provisions:

A coop must have at least 3 members, but can have as many as 60 or more. One vote per socio. As self-governing enterprises, coops are to set up their own internal democratic decision making structures.

Coops are independent of the state. They are to respond to the market. This is to overcome the limits that hampered some agricultural coops in the past.

Coops can do business with state and private enterprises. They will set their own prices in most cases, except where there are prices established by the state.

Some coops will be conversions of state enterprises, e.g. restaurants. They can have 10 year renewable leases for use of the premises, paying no rent in the first year if improvements are made.

Others will be start-up coops.

There will be second degree coops which are associations of other coops.

Capitalization will come from bank loans, a new Finance Ministry fund for coops and member contributions. Member contributions are treated as loans (not equity) and do not give additional votes. Loans are to be repaid from profits.

Coops are to pay taxes on profits and social security for socios.

Distribution of profits is to be decided by socios after setting aside a reserve fund.

Coops may hire wage labor on a temporary basis (up to 90 days). After 90 days a temporary worker must be offered membership or let go. Total temporary worker time cannot exceed 10% of the total work days for the year. This gives coops flexibility to hire extra workers seasonally or in response to increased market demands, but prevents significant collective exploitation of wage labor.

As of last summer (July 2014) 498 urban coops had been authorized. There are additional coops that are functioning but not yet recognized as legal entities. This is a big step forward for Cuba. Cooperative members have an incentive to make the business a success. The coop is on its own to either prosper or go under. Each member’s income and security depends on the collective. And each has the same voting right in the General Assembly where coop policy is made. Coops combine material and moral incentives, linking individual interest with a collective interest. Each member prospers only if all prosper. In a study of 29 new cooperatives Camila Pineiro Harnecker found that incomes have increased an average of three fold and as much as seven fold.

The renovation of socialism now under way in Cuba is an effort to reinvigorate civil society, opening up spaces for initiative outside of the state. In the next few years the non state sector of the economy, consisting of private businesses and cooperatives, is projected to provide 35% of employment and along with foreign and joint enterprises 45% of the gross domestic product. Addressing the problem of the lack of worker incentives under state socialism, these reforms are unleashing new productive energies that will lift the economy. But beyond that they stand to replace the passive participation of state socialism with the protagonistic participation better suited to a democratic socialism. This implies a new relation between the state and civil society.

One of the new cooperatives I visited last June was a small bar/restaurant in a poor section of Central Havana. A former state enterprise, the Okinawa bar cooperative has five members. It had been a cooperative for only eight months and the president told me that being able to make their own decisions is one of the greatest benefits they find. He was elected by his fellow workers. Interestingly, the former state manager, who is also a member, was not selected to lead the new cooperative.

The motivation engendered by this empowerment was dramatically demonstrated by a self organized construction cooperative we meet at the Institute of Philosophy. They were repairing the Institute building that had been badly damaged two years ago when the ceiling of the main first floor room collapsed, rendering most of the building unusable. A state construction company had made little progress on the repairs for the previous two years. But now the Institute has been able to engage this newly formed cooperative and in a short time they have made major progress. Our group was scheduled to have a meeting at the Institute on a Monday morning. And between the previous Thursday and that morning the ceiling had been rewired and plastered. And by the following week the Institute staff was moving back into their offices on the second floor. The 20 coop members are motivated by the fact that for the first time they control their work. They make the decisions. This is a powerful demonstration of the strength of cooperatives.

What we are seeing with the promotion of new cooperatives in Cuba is the constituted power of the state nurturing constituent power in civil society. Cooperatives are a socialist form of property under democratic management. As such, cooperatives have the virtue of nurturing socialist values, responsibility, democratic decision making, cooperation, and social solidarity. They are little schools of socialism. They embed socialism into the daily life of working people, engendering a socialist civil society.

In this respect they contrast with the new petty bourgeois small and medium sized private businesses now also being opened by the self employed. A petty bourgeoisie is seen as compatible with socialism –compatible as long as it is regulated and taxed so it doesn’t become a big bourgeoisie. Great inequalities of income and accumulation of wealth are to be avoided –a cautionary note made in the Guidelines. But it is clear a petty bourgeoisie is not socialist, it does not nurture a socialist consciousness, but the narrow mentality of the petty shop keeper. It does not nurture socialist social relations but individualism. A petty bourgeoisie is compatible with socialism when kept within limits. But it is not socialist.

But cooperatives are socialist. They represent associated producers coming together on a small scale to govern their worklife in a democratic way. It is this relation that the socialist transition needs to point toward. With the current opening to cooperatives, Cuba’s state socialism is finding a new road forward. Socialism cannot be built top down by state power alone. It has to be rooted at the base of society among ordinary people. Its values, its practices and its social relations have to be built into daily life where people live and work. This is the virtue of cooperatives. Cooperatives thus can help make socialism irreversible.

As Gramsci pointed out, the state penetrates down into civil society. Foucault takes this a step further with his notion of governmentality. This refers to those systems of control that extend even into the subjectivity of the human, into the self. This is what makes a social system self-governing and self-replicating. Cooperatives educate their members to the values and practices of a participatory socialism. This is more than an invigoration of civil society, it is also construction of a socialist governmentality in Foucault’s deeper sense. It is a resocialization of workers away from their passivity under a paternalistic state socialism to protagonistic participants able to found society anew. Some Marxists see cooperatives as a step back from what they consider a more advanced state socialism, perhaps even a step toward capitalism. But my view is that it is a step forward toward a society ruled by the associated producers.

If a social order is to be sustainable over the long run, it needs to be rooted in the character of the people. Their values, their sensibilities, their taken-for-granted understandings, their very subjectivity needs to be consonant with its institutions. The socialist transition is a process that needs a people with a socialist character if it is to continue. The social relations of cooperatives help build such a character among the people.

That’s why it is of the utmost importance that cooperatives be widely promoted. The benefits of cooperatives need to be publicized and training in cooperative practices needs to be available. There needs to be a network of promotoras who go out into society like the literacy workers in the early 1960s and teach the coop way. The Cuban Institute of Philosophy is doing just that in Central Havana. And our Center for Global Justice, which has been offering cooperative workshops for several years now here in Mexico, is collaborating with the Institute.

To state the current juncture in Cuba’s efforts to construct socialism in bold terms, there is a race for the soul of Cuba between the cooperative movement and expanding private businesses. Which will make up the larger part of that one third of non-state employment? Will it be socialist enterprises or proto capitalist ones? The government is favoring the development of cooperatives.

But now there is a new player in this contest: the Obama administration. That’s right. Obama’s relaxation of relations with Cuba presents a new challenge for the Revolution. While the belated decision to recognize that Cuba has its own government is to be commended, there is another, little noted aspect to the new US policy toward Cuba. This lies in numerous measures to assist in the development of a nascent capitalist class from the private business sector. A careful reading of the new US regulations reveals a concerted effort to direct resources to entrepreneurs within Cuba by means of remittances, material aid, training and trade.

For example, the level of remittances allowed is being increased so as to provide increased funding for private businesses. The Dec 17 White House press release says,

“Remittance levels will be raised from $500 to $2,000 per quarter for general donative remittances to Cuban nationals (except to certain officials of the government or the Communist party”. Similarly, the Commerce Department announced last month that exports of equipment and supplies to Cuba is allowed as well as imports from Cuba as long as the Cuban entity is independent of the government. The US seeks to expand “opportunities for self-employment and private property ownership…strengthening independent civil society.” The White House explicitly states “Our efforts aim at promoting the independence of the Cuban people so they do not need to rely on the Cuban state.”

In extending diplomatic recognition to Cuba, the US is acknowledging Cuba’s government. It is also accepting the reality that destabilizing a close neighbor is not in the interests of the US. The foundation of US policy up to the present was laid in the Eisenhower years in an April 1960 State Department guideline:

“[E]very possible means should be undertaken promptly to weaken the economic life of Cuba. ... a line of action which, while as adroit and inconspicuous as possible, makes the greatest inroads in denying money and supplies to Cuba, to decrease monetary and real wages, to bring about hunger, desperation and overthrow of the government.” [Office of the Historian, Bureau Of Public Affairs, U.S. Department Of State; John P. Glennon, et al., eds., Foreign Relations of the United States, 1958-1960, Volume VI, Cuba -Washington D.C.: GPO, 1991, 885.]

The Obama administration has accepted that this hard line has not worked in Cuba. Regime change in Cuba would not produce a stable society, witness Iraq, Afghanistan, Libya, etc.

That strategy is what has failed. But alongside it for some years there has been an increasing resort to what are euphemistically called “democracy promotion” programs. These involve support to opposition groups to strengthen civil society –as if there were no socialist civil society in Cuba. The civil society the US supports is those small groups who are against the government. This approach has also been unsuccessful. Nevertheless, Obama announced its continuation. Upgrading the US Interests Section in Havana to Embassy status will not end its support of dissidents. Nor will the CIA agents operating there under diplomatic cover be going home. The so-called “democracy promotion programs” will continue. Obama still thinks the US has the right to shape the future of its neighbor.

What is new in Obama’s approach is an emphasis on economic rather than political subversion. What is new in Obama’s policy is a turn away from regime change to systemic change. Recognizing the Cuban government does not mean accepting its socialist economic system.

Many observers expect a flood of US businesses into Cuba. But they forget that the embargo is still in place. Obama has relaxed aspects of it, but ending it would require Congressional action –not a likely prospect in the near future. In any case, Cuba has been very open to foreign investment for 20 years. Cuba recently enacted a new law on foreign investment designed to make it more attractive to investors from abroad. US corporations are eager to get a piece of the action that the embargo has long denied them. But when they are able to get in, Cuba will no doubt apply the same kind of limits as they do on other foreign investment. That means it will be in partnership with the Cuban state and for a specified number of years. Cuba is not about to give up its sovereignty.

What is more likely to transform Cuban society is the increased flow of money to individual private entrepreneurs in hopes of building the germ of a new capitalist class. This method takes advantage of Cuba’s opening to a non-state sector of its economy that includes private businesses along with cooperatives and foreign and joint ventures.

Obama’s aim is to help private businesses occupy as much of the non-state economic space as possible. The danger that presents to socialism lies in the fact that if they were to become a sizable part of the economy, the state, committed to the growth of the economy, would find it increasingly necessary to favor its interests. The basis of class power is not just direct control of the state, but a class’s weight in the economy.

That is why it is vital for the continued construction of socialism in Cuba, that cooperatives come to occupy as much of the non-state sector as possible. Progressives need to think seriously about how we can support the growth of cooperatives, genuine democratic worker run cooperatives. Cuba is now open to that and Obama has cleared the way for us to accept this unique opportunity. Just as funds and materials can be sent to individuals as long as they are independent of the government, so too can they be sent to cooperatives since they are also independent of government. And we can trade with Cuban coops as well, providing a wider market for their products.

Obama’s strategy is to change Cuba, not through regime change, but by promoting capitalism within the country through support of a petty bourgeoisie. After all, that has always been the fundamental objective of US policy – to bring Cuba back into the capitalist orbit. We have a unique situation in Cuba today. A socialist state is actively promoting cooperatives, thereby devolving economic power to people at the grassroots level. There is a rejuvenation of civil society underway, a socialist civil society. Solidarity calls on us to help it move forward along the road to a socialism for the 21st century.